Chinese police arrest two BP venture staff in fuel trade probe
Chinese police have arrested two senior staff members of a BP joint venture, in connection with an investigation into suspected illicit fuel trading.
The detentions, along with several more arrests in Guangdong, came after the province launched an investigation into suspected illicit trading of light cycle oil (LCO) between 2018 and 2020.
The Guandong police, who operate in China’s largest fuel consuming province, issued arrest warrants for more than 70 people in the probe, according to Reuters sources.
Under Chinese law, detention warrants allow people to be held for up to 37 days for investigations.
The subject of the warrants include two trading managers of BP Guangzhou Oil Products Development Co, a source said.
“This looks like a major crackdown led by the Guangdong provincial government,” they added.
BP Guangzhou is 40 per cent owned by BP and 60 per cent by local state-run Guangzhou Development Energy Logistics Group, according to the company website. It trades fuel and operates storage facilities in the provincial capital.
Chinese customs data showed LCO imports almost doubled on year to a record of nearly 16 million tonnes in 2020, as traders exploited a tax loophole by importing LCO to blend into diesel.
LCO is an oil product of similar qualities to diesel but is exempted by the Chinese government from the $29 per barrel tax that applies to diesel, making LCO trades lucrative.